The International Monetary Fund calls on Morocco to expand tax base, rationalize public spending

The International Monetary Fund confirmed that Morocco’s foreign exchange reserves remained stable and growing during the COVID-19 crisis.

The IMF added that despite the persistence of doubts associated with the prolongment of the pandemic, structural reforms undertaken by the Kingdom in a number of areas could accelerate growth in the medium term.

The institution indicated in its projections issued this Friday that Morocco’s fiscal policy remained expansionary during the current year, as it was characterized by an increase in current expenditures overtaking the pace of tax revenue growth that accompanied the economic recovery.

Experts of the IMF advised reducing the budget deficit and the provision of financial margins, to expand the tax base and increase its growth.

Bank Al-Maghrib has maintained the same interest rate since the start of the sanitary crisis, which helped Morocco’s central bank maintain liquidity support measures throughout 2021.

The IMF’s report supported this monetary approach considering well-established inflation projections.

The analysis of the institution’s experts stated that Moroccan banks were able to face the crisis thanks to the speed and impact of the support provided by Bank Al-Maghrib.

The IMF delegation for Morocco welcomed authorities’ determination to implement the structural reforms proposed under the new development model.

The reforms are expected to place the country on a stronger, more inclusive, and sustainable growth path by improving competition, enhancing Morocco’s competitiveness, encouraging economic growth, and increasing confidence in the public sector and the judiciary.